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Federal Court - Jurisdiction (3). Dumais Estate v. Canada (Indian Affairs and Northern Development)
In Dumais Estate v. Canada (Indian Affairs and Northern Development) (Fed CA, 2026) the Federal Court of Appeal dismissed an appeal, here where the "Federal Court found that it did not have jurisdiction to entertain the appellants’ action against Kehewin under either subsection 17(4) [SS: 'Conflicting claims against Crown'] (where interpleader is considered) or (5) [SS: 'Relief in favour of Crown or against officer'] of the Federal Courts Act":[10] Since Kehewin did not recognize these members or provide them with the services and benefits their membership entitles them to, the appellants commenced an action for declaratory relief and damages against both Kehewin and the Minister of Indian Affairs and Northern Development, claiming that the defendants owed and had breached a fiduciary duty to ensure the provision of monies and benefits flowing from the appellants’ membership in the Kehewin Band. They also claimed that Kehewin’s conduct constitutes discrimination under subsection 15(1) of the Charter on the grounds of sex, Aboriginality-residence, Aboriginality-status, and family status.
[11] After protracted proceedings, Justice Manson struck Kehewin’s defence in 2009 and, on motion for partial relief, found in 2012 that the applicants were entitled to band membership. He also ordered that their names be restored to all versions of the Kehewin Band membership list used and maintained by Kehewin Band and Kehewin Band Council, "“including membership lists consulted for the purposes of voting and membership benefits”".
[12] In the second phase of the default proceedings in this action, the appellants filed a motion in 2016 for default judgment and sought an assessment of damages resulting from discrimination, breach of fiduciary duty, and unjust enrichment resulting from Kehewin’s associated denial of all tangible and intangible benefits of band membership. The action against Canada has been held in abeyance pending disposition of that motion.
[13] After having heard the motion and directed the appellants to submit a draft judgment giving effect to the reasons given orally, Justice Lafrenière of the Federal Court (the motion judge) raised proprio motu the issue of the Court’s jurisdiction and directed the parties to file further submissions on this question. Though Kehewin’s statement of defence had been struck, Justice Lafrenière allowed their request to submit both written and oral submissions on the issue of jurisdiction.
[14] Following a hearing confined to this question, he found that the Federal Court lacked jurisdiction under either subsection 17(4) or paragraph 17(5)(b) of the FCA, and thus lacked the statutory grant of jurisdiction required under the ITO test set out by the Supreme Court of Canada in ITO-Int’l Terminal Operators v. Miida Electronics, 1986 CanLII 91 (SCC), [1986] 1 S.C.R. 752 [ITO].
[15] On subsection 17(4) — conflicting claims against the Crown — he found that the "“nature of the proceeding generally contemplated”" by the provision is that of an interpleader (Decision at para. 66). Therefore, he reasoned that the conflicting claims must be irreconcilable ones, in which Canada must determine to which party to deliver the relevant property. On the evidence, he found no basis for such an irreconcilable claim and concluded that subsection 17(4) could therefore not grant jurisdiction.
[16] On paragraph 17(5)(b) — relief against an officer, servant, or agent of the Crown — Justice Lafrenière found limited basis in the jurisprudence for determining that an Indian Band acted as an agent of the Crown, a question hinging on the level of control exercised by Canada over the specific acts in question. Again, however, the evidence established no basis for such a relationship of agency, and paragraph 17(5)(b) was dismissed as a source of jurisdiction.
[17] As a result, Justice Lafrenière found that the Court was without statutory grant of jurisdiction, and was forced to dismiss the motion for default judgment.
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[27] To ensure that the Federal Court does not exceed its constitutionally limited role, the Supreme Court set out a three-part test in ITO, at 766, which it reaffirmed in Windsor, at para. 34:1. There must be a statutory grant of jurisdiction by the federal Parliament.
2. There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction.
3. The law on which the case is based must be “a law of Canada” as the phrase is used in s. 101 of the Constitution Act, 1867. [28] In the case at bar, only the first branch of this test is in issue. The appellants do not dispute that no specific legislation grants the Federal Court jurisdiction to determine the existence or extent of any liability owed by an Indian band to its members in respect of membership benefits. They submit, however, that subsection 17(4) or paragraph 17(5)(b) of the FCA, whether separately or together, satisfy the first branch of the ITO test. These provisions read as follows:"17(4) The Federal Court has concurrent original jurisdiction to hear and determine proceedings to determine disputes in which the Crown is or may be under an obligation and in respect of which there are or may be conflicting claims."
"17(4)"" Elle a compétence concurrente, en première instance, dans les procédures visant à régler les différends mettant en cause la Couronne à propos d’une obligation réelle ou éventuelle pouvant faire l’objet de demandes contradictoires."
"17(5) The Federal Court has concurrent original jurisdiction"
"17(5)"" Elle a compétence concurrente, en première instance, dans les actions en réparation intentées :"
"(a) in proceedings of a civil nature in which the Crown or the Attorney General of Canada claims relief; and"
"a)"" au civil par la Couronne ou le procureur général du Canada;"
"(b) in proceedings in which relief is sought against any person for anything done or omitted to be done in the performance of the duties of that person as an officer, servant or agent of the Crown."
"b)"" contre un fonctionnaire, préposé ou mandataire de la Couronne pour des faits — actes ou omissions — survenus dans le cadre de ses fonctions." A. Subsection 17(4) of the Federal Courts Act
[29] The parties, as well as the Federal Court, properly took as their starting point for the interpretation of subsection 17(4) of the FCA the Supreme Court’s decision in Roberts. That case concerned competing claims by two Indian bands to possession of the same reserve. The plaintiff sued the Crown for breach of fiduciary duty, alleging that the Crown had permitted the defendant band to occupy a reserve that the plaintiff claimed was its own.
[30] Writing for a unanimous Court, Justice Wilson held that paragraph 17(3)(c)—the predecessor to subsection 17(4)—conferred the necessary jurisdiction under the first branch of the ITO test. The Court held that four requirements must be met for the Federal Court to have jurisdiction under that provision: (1) there must be a proceeding; (2) to determine a dispute; (3) in which the Crown is or may be under an obligation; and (4) in respect of which there are or may be conflicting claims. The Court had no difficulty finding those requirements met. In particular, the Crown was under an obligation to hold the reserve for the use and benefit of the properly entitled band, and there were two conflicting claims between two Indian bands.
[31] Subsection 17(4) has no direct predecessor in the Exchequer Court Act, R.S.C. 1952, c. 98. As noted by the Supreme Court in Roberts, the closest provision in that Act was subsection 24(1), which provided, inter alia, that:The [Exchequer] Court has jurisdiction […] to entertain suits for relief by way of interpleader in all cases […] in respect of which the Attorney General expects that the Crown […] will be sued or proceeded against by two or more persons making adverse claims thereto […] [32] On its face, subsection 17(4) is broader than its predecessor and is not limited to interpleader proceedings. It is true, as the Federal Court noted, that the Supreme Court went on to say that "“at first blush it is hard to envisage situations other than interpleader in which the requirements of s. 17(3)(""c) will all be met”" (at 335). However, as the Court immediately recognized, the facts in Roberts provided just such a situation.
[33] In Roberts, the Crown was not a neutral stakeholder. Although it was caught between two claimants to the same reserve, it had clearly sided with the defendant band. As the Supreme Court noted, an interpleader must be neutral. The Crown might have been characterized as an interpleader only if it had itself commenced proceedings against the two competing Indian bands. What subsection 17(4) requires is that the Crown be under an obligation and face conflicting claims with respect to that obligation. The Federal Court’s decision in Jones Estate v. Louis, 108 F.T.R. 81, [1996] 3 C.N.L.R. 85, provides another illustration of this scenario.
[34] The requirement that the Crown is or may be under an obligation has been interpreted liberally in later cases. In Montana Band v. Canada (T.D.), 1991 CanLII 13618 (FCTTD), [1991] 2 F.C. 273, aff’d [1993] 2 C.N.L.R. 134, leave to appeal to the Supreme Court refused, the Federal Court held that subsection 17(4) is not limited to situations in which two or more parties have independently initiated conflicting claims. It also applies where one party asserts that the Crown owes it an obligation and the Crown responds that the obligation is owed to a third party.
[35] The appellants rely heavily, as they did before the Federal Court, on three decisions by a prothonotary, the Federal Court, and this Court in Hodgson v. Ermineskin Indian Band No. 942, 1999 CanLII 8558, 2000 CanLII 15066, and 2000 CanLII 16686 [Hodgson]. In that case, the Ermineskin Indian Band, unlike the Kehewin Band, had adopted its own membership rules and a membership code pursuant to the Indian Act. The pleadings alleged that the Crown had breached its fiduciary obligation by allowing several plaintiffs to be deleted from the Band membership list, by failing to advise them of financial and other benefits, and by failing to protect their interests from a course of action that deprived them of those benefits. The plaintiffs sought declarations that they were members of the Band and entitled to receive membership benefits. In its defence, the Crown pleaded that it had no further responsibility once the Ermineskin Band took control of its own membership.
[36] Prothonotary Hargrave first adopted an expansive view of subsection 17(4), stating that the statement of claim need not affirmatively plead a competing claim, provided that competing claims may flow from the facts as pleaded. He was prepared to accept that possibility for three reasons: the Minister may have retained oversight responsibilities under the grandfathering band membership provisions of the Indian Act; the claim for damages concerned not only present membership but also past membership; and those potential obligations could give rise to competing claims as to whether payment was owed by the Crown, by the Ermineskin Band, or by both as a divided obligation.
[37] On appeal, Justice Reed upheld the prothonotary’s decision and found that the dispute over continuing authority, or potential fiduciary responsibility, gave rise to potentially conflicting claims. This Court confirmed the Federal Court’s decision on further appeal, although it expressed reservations about the Court’s jurisdiction under section 17.
[38] The first point to note about these cases, and many others decided by the Federal Court in similar circumstances, is that they arose on motions to strike for lack of jurisdiction. The burden on such motions is high: the moving party must show that it is plain and obvious that the claim discloses no reasonable cause of action or, as here, that the Court lacks jurisdiction. It was precisely on that basis that this Court dismissed the appeal in Hodgson, despite being "“by no means confident”" that it had jurisdiction over the plaintiffs’ claim. These cases therefore provide only limited support for the jurisdiction of this Court and of the Federal Court in the matter before us.
[39] The appellants submit that there are competing claims in this case because both Kehewin and the Crown claim to control the membership list. More particularly, they say that both Canada and the Band owed them a fiduciary duty: Canada to ensure the provision of monies and other benefits properly payable or accruing to them, and the Band to provide those monies and benefits by virtue of their band membership or Indian status. The difficulty is that these are not conflicting claims, but concurrent claims. As the motion judge noted, what matters is not whether the appellants have claims against both Canada and Kehewin with respect to the membership list, but whether those claims are conflicting. The fact that Canada and Kehewin disagree about the identity of the persons entitled to be on the Kehewin membership list, or the requirements for inclusion on that list, does not give rise to competing claims against Canada. There is no evidence on the record that Canada’s fulfilment of any duty it may owe to one party would preclude it from fulfilling a duty to the other.
[40] The situation might have been different had there been evidence establishing that Kehewin sought or administered benefits that may have been due to Bill C-31 members. The evidence, however, is to the contrary. The motion judge found, on the record before him, that Kehewin never applied for or administered any supplementary funding made available to bands after the implementation of Bill C-31 to assist them in accommodating reinstated members. Kehewin refused to access that funding because it did not wish to accept Bill C-31 members. As a result, the Crown never faced competing or conflicting claims with respect to the allocation of funds deriving from its fiduciary obligations, as it might have if it had disbursed supplementary funding to the Band and the appellants had then claimed that those funds were owed to them.
[41] Accordingly, I am not persuaded that the Order and Reasons below disclose any legal error in the interpretation of subsection 17(4) of the FCA. Nor am I satisfied that the Federal Court made any palpable and overriding error in construing the pleadings or assessing the evidence. To accept the appellants’ submission that claims against Canada and a third party are sufficient to satisfy subsection 17(4) would stretch that statutory grant of jurisdiction beyond its text and purpose, and beyond the scope contemplated by the Supreme Court in Roberts.
B. Paragraph 17(5)(b) of the Federal Courts Act
[42] The appellants submit as a second ground of potential jurisdiction for the Federal Court that Kehewin was the agent of the Crown for the purpose of delivery of membership services and benefits, therefore bringing into play paragraph 17(5)(b) of the FCA. They claim that the Court below failed to grapple with the evidence on the record showing that the Crown could have compelled compliance from Kehewin on all matters, including on band membership and on distribution of monies and other benefits to Band members, but chose not to exercise this control.
[43] In my view, this argument is devoid of any merit and was rightly dismissed by the Federal Court. The jurisprudence is absolutely clear that a band council generally does not act as an agent of the Crown: see, inter alia, Stoney Band v. Stoney Band Council, [1996] F.C.J. No. 1113, 118 F.T.R. 258 (FC) at paras. 10-12; Bear v. John Smith Indian Band, Chief and Council of the John Smith Indian Band, 1983 CanLII 2270 (SK QB), [1983] 5 W.W.R. 21, 26 Sask. R. 280 (SKQB) [Bear] at para. 12; Charlie v. Vuntut Gwitchin First Nation, 2002 FCT 344 (CanLII), 2002 F.C.T. 344 [Charlie] at paras. 27-34; Hodgson v. Ermineskin Indian Band No. 942, 1999 CanLII 8558 at paras. 42-45; Powderface v. Baptiste (1996), 118 F.T.R. 258 at 262-263.
[44] This is not to say that a band council, under the correct set of facts, could never be in an agency relationship with the Crown: see Bear, supra; Cooper v. Tsarlip Indian Band, [1996] F.C.J. No. 826. None of the parties, however, were able to locate a single case in which such a finding was made.
[45] I note, incidentally, that the statement of claim does not set out in so many words that Kehewin is a servant or agent of the Crown, nor do the pleadings allege facts which would support a finding that the Kehewin Band Council was an agent of the Crown. They merely refer to section 9 of the Indian Act, which describes the Registrar’s obligation to maintain and update the Band List until such time as a band assumes control over its membership. I also note that Canada has not defended the statement of claim on the basis that the Kehewin respondents were Canada’s agent or that they breached any obligations to the federal Crown. Indeed, Canada submitted in the Court below that the only possible source of jurisdiction in this action is subsection 17(4).
[46] Of more critical importance is the fact that the concept of agent or servant of the Crown, as described in section 3 of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, requires not only a de facto control but also a de jure control. In other words, a person will be considered a servant of the Crown if the Crown retains the right to direct, control or supervise the manner in which that person performs the relevant function: see, for example, Rebello v. Canada (Justice), 2023 FCA 67 at paras. 21-22. The most widely accepted statement as to what the concept of "“servant”" or "“agent”" requires is that of the Exchequer Court of Canada in Union Packing Company Limited v. The King, 1945 CanLII 614 (CA EXC), [1946] Ex. C.R. 49 at 54 (reversed by the Supreme Court albeit on other grounds: Union Packing Co. Ltd. v. The King, 1946 CanLII 25 (SCC), [1946] S.C.R. 456):It is, I think, clear from these authorities that the question whether a body performing functions of a public nature is a servant or agent of the Crown or is a separate independent entity depends mainly upon whether it has discretionary powers of its own, which it can exercise independently, without consulting any representative of the Crown. See also: Charlie at para. 29; Bear at para. 5; Carten v. Canada, 2009 FC 1233, aff’d 2011 FCA 289; leave to appeal refused.
[47] While the appellants argue that the Court below failed to grapple with the evidence in support of paragraph 17(5)(b) jurisdiction, they have not referred us to any specific provision of the Indian Act or to an agreement with Canada whereby the Crown would retain the necessary control over the preparation of the Band membership list and the distribution of monies and other benefits to members of Kehewin. At best, we were referred to various documents presented by the appellants in their final submissions before the Federal Court, purporting to show that Kehewin was obligated to address the Minister’s concerns about program delivery, that it was required to develop an accountability framework, that Canada could impose co-management when Kehewin was in default, and other similar clauses. These provisions are clearly not sufficient to establish the degree of control required to demonstrate that Kehewin was acting as an agent of the Crown when dealing with the appellants, and pertain rather to the proper management of public funds. If anything, these stopgap measures would tend to show that Kehewin is endowed with a large degree of autonomy in its day-to-day administration of the Band, and does not act as a mere conduit for the Crown or the Minister. The same is true of sections 61 to 69 of the Indian Act, which deal with the "“Management of Indian Moneys”".
[48] I am therefore of the view that the Federal Court did not err in concluding that a correct interpretation of paragraph 17(5)(b) doesn’t grant it jurisdiction over the appellants’ claim.
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